An Angel in New York: David S. Rose

Before becoming “the father of angel investing in New York,” as described by Crain’s New York Business, and being called “New York’s Archangel” by Forbes, Rose spent the first 2 years after graduating from Yale as the regional director of the New York office of Senator Daniel Patrick Moynihan.

With his bachelor’s degree in urban affairs, Rose left Moynihan’s office and became vice president of Rose Associates, Inc., a developer, manager and marketer of premium residential and commercial properties. He spent his time at Rose Associates developing technology-enhanced real estate for Boston, NY and Washington, DC. He held the position for 20 years, during which time he became founder and CEO of Ex Machina, a computer software company, and AirMedia.

Founded in 1988, AirMedia was a wireless Internet pioneer, but the company went bankrupt 10 years later. “When AirMedia went down it was the single biggest disappointment of my life at that point. I cried myself to sleep,” said Rose in a 2010 interview. About 30 days after AirMedia filed bankruptcy, a company called Wireless Internet bought the assets.

In 1999, 2 years after being honored as a finalist for Ernst and Young’s Entrepreneur of the Year Award, Rose expanded his reach and involvement in the startup world when he became managing partner of the investment fund and incubator Rose Tech Ventures. The firm, which focuses on seed and early-stage businesses, provides management, mentoring and support. The team incubates their own companies as well as invests in other entrepreneurs. Rose Tech Ventures typically invests in sectors such as Internet platforms, ASP services, security, out-of-home advertising, wireless and B2B market-making networks, but is not limited to those fields. It is regarded as one of the earliest “super angel” funds on the East Coast.

Called a “world conquering entrepreneur” by BusinessWeek, one of Rose’s more recent accomplishments includes being the founder and CEO of Gust (formerly Angelsoft), a global platform for the management and sourcing of early-stage investment. The platform is used by over 40,000 early-stage investors in 75 countries.

As an angel investor, Rose’s mentoring and guidance has led to him being on the board of many startups. Former companies include Comixology, Koolspan, Pond5, Magnify Networks, Socialbomb, Say Media and Por ti, Familia. He has helped to fund over 80 start-up companies.
Apart from his work at Rose Tech Ventures, Rose is the chairman of Egret Capital Partners, a private equity investment fund for the lower-middle market.

Rose is the founder and Chairman Emeritus of New York Angels, an independent organization for angel investors. New York Angels invest in seed and early-stage companies, with investments ranging from $100,000-$1,000,000. He also founded the Finance, Entrepreneurship & Economics track at Singularity University, a post-graduate program that trains future leaders in advancing technologies.

Rose was also the host of the reality competition Second Chance. Sponsored by Sprint for MSN’s BusinessOnMain site, the show was a 6-episode web series in which 4 entrepreneurs with previously failed businesses competed for $150,000 and a second chance at starting their business, through educational challenges.

Rose is an Associate Fellow of Pierson College at Yale University and works with the Entrepreneurship Advisory Board of Columbia Business School (where he had received his MBA in Finance). He also has an honorary Doctor of Engineering degree from Stevens Institute of Technology.

He is a frequent guest lecturer at business schools including Harvard, Columbia, NYU and Venture for America. In 2005, BusinessWeek wrote an article about him titled “The Pitch Coach,” praising his coaching sessions for entrepreneurs preparing to seek funding for their startups.

In 2009, he was named Mentor of the Year at NYU Stern Business School.

On choosing the right investments as an angel: “It’s partly art, science and a lot to do with portfolio diversification. Nobody can pick early-stage companies correctly even a majority of the time. Most angel investments fail completely.”

On the importance of integrity in business: “Without question, the single most important attribute of a successful entrepreneur is integrity. And that’s not some philosophical or theoretical malarkey; it’s hard-nosed fact. When we invest in a startup, we’re not investing in cash flow or assets. Instead, we’re investing 100% in the person because that’s all we’ve got.”

Advice for individuals contemplating entrepreneurship: “It will be without question the hardest thing you will do in your life, and it is absolutely critical that you find personal joy and fulfillment in the process of entrepreneurship, in which case the economic success of your venture will simply be the icing on the cake.”

On a successful market pitch: “Anything that makes me think, anything that I don’t understand, where I have to make the leap myself in my own head, is going to stop the flow of the presentation. You’ve got to take me through it like a sixth-grader, but without patronizing me.”

On expressing your commitment-level in your pitch: “I want you to say, or I want you to convey, that you are going to die if you have to, with your very last breath, with your fingernails scratching as they drag you out, you’re going to keep my money alive and you are going to make more money out of it.”

On the difference between angels and VCs: “People often say ‘angelsandVCs,’ like it’s one word without spaces. But there is a big difference. VCs are professional money managers who raise a fund of other people’s money, and invest millions in a start-up company. In contrast, angel investors are individuals who invest their own money into early-stage companies…VCs tend to invest later on when they have more traction. Angels essentially bet on the entrepreneur.”

On finding your place in the startup world: “Business school students come by my office and ask, ‘Should I be a venture capitalist? Should I be an entrepreneur?’ I tell them, if you’re asking that question, you already know the answer, because otherwise you would have started a company! If you’re an entrepreneur, you have the drive, and you have to do this. No matter how many times you’re punched down, you’ll get up and you’ll try it again. That’s what entrepreneurship is about.”